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Growing the Economy in the Greater Rochester Region Drawing on the Competencies of the Finger Lakes

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Growing the Economy in the Greater Rochester Region Drawing on the Competencies of the Finger Lakes Research to drive informed decisions. Expertise to create effective solutions. GROWING THE ECONOMY IN THE GREATER ROCHESTER REGION DRAWING ON THE COMPETENCIES OF THE FINGER LAKES Prepared for: Finger Lakes Wired Stephen M. Mitchell, PhD Project Director One South Washington Street 100 State Street Suite 400 Suite 930 Rochester, NY 14614 Albany, NY 12207 Phone: (585) 325-6360 Phone: (518) 432-9428 Fax: (585) 325-2612 Fax: (518) 432-9489 www.cgr.org August, 2007 © Copyright CGR Inc. 2007 All Rights Reserved i GROWING THE ECONOMY IN THE GREATER ROCHESTER REGION DRAWING ON THE COMPETENCIES OF THE FINGER LAKES August, 2007 SUMMARY The Center for Governmental Research (CGR) was engaged to identify the key competencies of the Finger Lakes region and make recommendations to Finger Lakes Wired on strategies to capitalize on these competencies for the expansion of the region’s economy. Project Elements CGR reviewed and consolidated elements from a number of sources, including a series of focus groups with leaders of businesses identified by various means as particularly successful. The focus groups and interviews were particularly important as they added the “texture” of day-to-day experience to the bare statistics. The statistics may tell us what happened—such as employment and payroll trends—but not how or why. The first step in CGR’s work was a review of the analyses completed by New Economy Strategies (NES), Center for Integrated Manufacturing Studies (CIMS), and Greater Rochester Enterprise (GRE). Second, we analyzed the Rochester Top 100 lists from the previous ten years, a compilation of conspicuously successful private firms across the full range of business sectors. CGR identified the companies that have frequently appeared in the Rochester Top 100 and analyzed these companies using several different criteria. With the help of GRE and HTR, CGR identified six sectors within which to convene focus groups: Information Technology (IT), Advanced Manufacturing, Optics/Imaging, Biomedical, Service, and Agribusiness. After adding successful public ii companies, CGR identified and invited the leaders of 160 different firms in the greater Rochester region to participate in sector-based discussions. About one quarter of these leaders participated, giving generously of their time. Findings The benchmark of success in today’s dynamic global marketplace is flexible management. We conclude that while technical competencies—information and communication technology, optics/imaging and others—are important to the success of many Finger Lakes firms, it is management competencies that set the outstanding companies apart from the rest. Also important—and the particular responsibility of economic development initiatives— are enabling competencies, competencies that encourage the dissemination of both management and technical competencies and encourage the growth of the region as a whole. No Unique Competitive Some may find this conclusion disappointing, hoping that CGR Advantage? would identify a unique technical competency that sets the Finger Lakes region apart from its global competitors, granting the region some distinct competitive advantage. We see this differently: As is amply demonstrated by the diversity of the region’s successful companies, the Finger Lakes can be globally competitive in a wide variety of technologies, products and services. This diversity has supported the regional economy even as the market of its most prominent economic engine—the Eastman Kodak Company— has nearly disappeared and with it, the need for tens of thousands of skilled workers. This diverse economic base will preserve the stability and prosperity of the Greater Rochester region for decades to come. Economic Strategy CGR’s report concludes with a series of recommendations on Must be Deep AND strategic initiatives that will strengthen key competencies, Broad particularly the critical management competencies. Unlike a focus on a single technical competency, however, these recommendations address the broad range of activities that support the diversity of business in the region. iii Workforce development—the centerpiece of the Wired collaborative—must also be the centerpiece of the community’s economic development strategy, although the “workforce” includes the managers and entrepreneurs just as much as the employees on the shop floor, in the office, or in the laboratory. Build on Existing Few of CGR’s recommendations are new and none are uniquely Initiatives ours. We have drawn on the recommendations of national experts as well as the experts and institutional priorities from within the region. In today’s global marketplace, an effective economic development program has many elements, most of which will require ongoing collaboration, tenacious execution, and a significant financial commitment from the private sector and the public sector at all levels. The Greater Rochester region is endowed with effective institutions in the public and private sectors that support economic development. The competent and dedicated professionals who work in these entities will find no surprises among our recommendations—particularly as many of the recommendations support initiatives that have been in place for many years or are already in the planning stages. NOTE: Some existing initiatives and institutions are mentioned in the text for purposes of illustration. These citations are not intended to serve as a complete listing of programs in place or institutions providing particular services. An asset inventory is being compiled and will be made available in a web-searchable form during the fall of 2007. iv TABLE OF CONTENTS Summary..................................................................................................i Project Elements .................................................................................................. i Findings.............................................................................................................. ii No Unique Competitive Advantage? ................................................................... ii Economic Strategy Must be Deep AND Broad...................................................... ii Build on Existing Initiatives ...............................................................................iii Table of Contents................................................................................... iv Acknowledgments ............................................................................... viii Introduction............................................................................................1 Background and Rationale......................................................................2 New Business Model ............................................................................................ 2 Technology Drives Convergence of Sectors & Markets ......................................... 2 Sector-Based Strategies Fall Short ..................................................................... 2 Wired’s Purpose .................................................................................................. 2 Core Competencies .................................................................................3 Clusters Driven by Competencies .......................................................................... 3 Competencies Drive Competitiveness ................................................................. 4 The Age of Specialty Economies Has Ended........................................................ 4 Management Competencies Make the Critical Difference .................................. 4 Key Technical Competencies Enable Broad Economic Expansion ....................... 4 Enabling Competencies.................................................................................. 5 Management Competencies.................................................................................. 5 Competency 1: Systems & process integration .............................................. 6 Competency 2: Strategic sensibility .............................................................. 6 Competency 3: Customer responsiveness ..................................................... 6 Competency 4: Talent identification and development ................................... 6 Competency 5: Quality and operational excellence ........................................ 6 Competency 6: Entrepreneurial ethos........................................................... 6 Technical Competencies....................................................................................... 6 v Competency 7: Information & communications technology............................. 7 Competency 8: Optics and imaging .............................................................. 7 Competency 9: Biomedical research ............................................................. 7 Competency 10: Agribusiness/Food Processing ............................................. 7 Enabling Competencies ........................................................................................ 8 Competency 11: Translational science .......................................................... 8 Competency 12: Business network creation and nurturing.............................. 8 Competency 13: Business service support network........................................ 8 Recommendations ..................................................................................9 Premises..........................................................................................................
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